It’s always some sort of schemeWould The US Government Want To Issue CAT Bonds At Scale To Finance Losses From Climate Change? Investors pay let’s say $100 million to the SPV. This money will be used to pay out insured parties should the insurance company have to pay up if disaster strikes. The insurance company hands off the premiums it receives from selling coverage of $100 million to the SPV. If the earthquake of 7.0 or higher does strike, the insurance company pays off the $100 million to insured parties.